Detroit Prepares for Possible Finance Agreement

The city of Detroit was moving closer to avoiding a state-appointed emergency manager Wednesday, crafting a possible deal with the state to guide fixing its troubled finances.

A state-appointed review team approved an agreement between the state and city. David Whitaker, an attorney for the Detroit city council, said he expected the council to vote on the agreement later Wednesday.

The city is faced with a nearly $200 million deficit and the unwanted prospect of having an emergency manager appointed if it doesn't act.

Gov. Rick Snyder has a Thursday deadline by which to decide whether the city is in a financial emergency. A consent deal would give him a key option to avoid appointing an emergency manager.

The high-stakes meetings come as Detroit Mayor Dave Bing, recovering from surgery to correct a perforated colon, was readmitted to a hospital Wednesday as a precaution because of discomfort. Bing would have to sign off on the deal for it to take effect.

The Detroit case is the highest-profile yet involving a controversial, year-old Michigan law that gives the state more power to intervene in financially troubled cities and school systems. Emergency managers have the power to toss out union contracts and strip locally elected leaders of authority. A petition drive aimed at overturning the Michigan law is trying to qualify for the November ballot.

If the consent agreement is authorized in its current form, tentative new contracts featuring wage, benefits and pension concessions negotiated between Bing and about 30 unions representing city employees will be nullified. More concessions likely will be put on the table.

"Benefits, vacation, sick time, health care, that's all up in the air with the consent agreement," said Yolanda Langston, Detroit chapter president of the Service Employees International Union. "Those things we are very much concerned with. We're more concerned about the elimination of departments. We're concerned with our jobs."

Langston noted it is illegal for public employees to strike and said "we're not taking that position."

"It would be good to stand in solidarity, and it would also send a strong message if everybody was in unison," she added.

City unions are considering their options, said John Riehl, president of American Federation of State, County and Municipal Employees Local 207.

"All these things they are putting in front of us, whether an emergency manager or a consent agreement, if they think they are going to tear up our union rights, the skies the limit," Riehl said.